Zeddy103 Posted April 4, 2013 Report Share Posted April 4, 2013 Hey guys, Quick question regarding student loans. Do you have to pay this back starting in residency or do you wait till you are done? Thanks. Link to comment Share on other sites More sharing options...
NLengr Posted April 4, 2013 Report Share Posted April 4, 2013 For most of Canada, at the start of residency. Quebec waits till you are done. I think Alberta provincial portion is also held till you are done (some Albertan will have to clarify). Link to comment Share on other sites More sharing options...
thehumanmacbook Posted April 4, 2013 Report Share Posted April 4, 2013 Is the strategy usually to pay off the student loans using LOC so as to avoid interest? Link to comment Share on other sites More sharing options...
Lactic Folly Posted April 4, 2013 Report Share Posted April 4, 2013 1) Albertan government pays interest on the Alberta provincial loan each year while still in residency. Interest accumulates on the Canada student loan. 2) Depends: Which has higher interest, your LOC or the student loan? Link to comment Share on other sites More sharing options...
jrmch Posted April 4, 2013 Report Share Posted April 4, 2013 PEI has a "Medical Residency Interest Relief Program". The Government of Prince Edward Island has established a Medical Residency Interest Relief Program which provides financial assistance to students completing a residency program. Who qualifies? Island students in a Medical Residency program who have a PEI student loan are eligible to apply. Description This interest relief program applies to provincial student loan balances. The Government of Prince Edward Island will make interest payments to keep loans in good standing while a student is completing a residency program. Source: http://www.studentloan.pe.ca/index.php3?number=1039556〈=E Link to comment Share on other sites More sharing options...
jrmch Posted April 4, 2013 Report Share Posted April 4, 2013 2) Depends: Which has higher interest, your LOC or the student loan? For PEI, student loans are at 0% interest for now (next election is in 2015, so we will see from there). If your LOC is at prime, you do the math... Link to comment Share on other sites More sharing options...
Zeddy103 Posted April 5, 2013 Author Report Share Posted April 5, 2013 And I just read that Ontario has a relief program too. But from what I read they give you a LOAN to pay back your loans and in exchange for that loan you have to give them 5 years of service? That doesn't sound like a good deal... basically you are allowed to pay back your interest later for 5 years of service, you don't gain anything since all they're giving you is a loan? Am i reading that right? Link to comment Share on other sites More sharing options...
NLengr Posted April 5, 2013 Report Share Posted April 5, 2013 And I just read that Ontario has a relief program too. But from what I read they give you a LOAN to pay back your loans and in exchange for that loan you have to give them 5 years of service? That doesn't sound like a good deal... basically you are allowed to pay back your interest later for 5 years of service, you don't gain anything since all they're giving you is a loan? Am i reading that right? They pay the INTEREST ONLY during your residency. They do not pay down the principle. So it's likely <10k of value. In exchange you have to practice for 5 years in Ontario when you are finished. It's a horrible deal, even if you are 99% sure you want to practice in Ontario. It's far too much limitation (given the current limited job market for almost all specialties) for far too little return (I can make 10 k in 2 weeks as a staff, anyone could make it in a month). I find it insulting. My time as a staff is worth way more than that terrible offer. Newfoundland also does not charge interest on it's provincial portion of the loan. Link to comment Share on other sites More sharing options...
Zeddy103 Posted April 5, 2013 Author Report Share Posted April 5, 2013 Thats what I thought it meant but i couldn't believe it was such a bad deal... Link to comment Share on other sites More sharing options...
rmorelan Posted April 5, 2013 Report Share Posted April 5, 2013 Thats what I thought it meant but i couldn't believe it was such a bad deal... well wait, it isn't quite that bad - you can break the contract for 4K max and paying back all the interest you would've had to pay anyway if you weren't on that plan. So it becomes a probability of risk thing - say you are 99% sure you are staying (as someone pointed out as a example). You potentially will save all the interest on your loan for up to 5 years - which can be even at low rates of interest (which it won't always be) 25% of the loan - that is a lot of cash really. Even if you pulled it all onto your LOC at 3% it would be say low balling it 15-20% (with compounding and those interesting rates will rise from rock bottom levels). That doesn't include fellowships which are also covered. For many that can be 10s of thousands of dollars in the end. You have to balance that against where you will practise likely. There for everyone a relatively logical point where it is a good deal - and that point is no where near 99% - assuming you are not illogically risk adverse (a lot of people are though, that kind of makes sense as emotionally using money sucks). Not trying to over sell this - the point is there is a relatively low cost escape clause - 4K to a practising doctor is not really that big of a deal. Link to comment Share on other sites More sharing options...
future_doc Posted April 5, 2013 Report Share Posted April 5, 2013 And if this payment is tax deductible, then the government will share in the $4,000 cost, reducing the after tax cost to you even further. Link to comment Share on other sites More sharing options...
Zeddy103 Posted April 5, 2013 Author Report Share Posted April 5, 2013 You lost me at 4K max. Thank god I'm not in finance... well wait, it isn't quite that bad - you can break the contract for 4K max and paying back all the interest you would've had to pay anyway if you weren't on that plan. So it becomes a probability of risk thing - say you are 99% sure you are staying (as someone pointed out as a example). You potentially will save all the interest on your loan for up to 5 years - which can be even at low rates of interest (which it won't always be) 25% of the loan - that is a lot of cash really. Even if you pulled it all onto your LOC at 3% it would be say low balling it 15-20% (with compounding and those interesting rates will rise from rock bottom levels). That doesn't include fellowships which are also covered. For many that can be 10s of thousands of dollars in the end. You have to balance that against where you will practise likely. There for everyone a relatively logical point where it is a good deal - and that point is no where near 99% - assuming you are not illogically risk adverse (a lot of people are though, that kind of makes sense as emotionally using money sucks). Not trying to over sell this - the point is there is a relatively low cost escape clause - 4K to a practising doctor is not really that big of a deal. Link to comment Share on other sites More sharing options...
rmorelan Posted April 5, 2013 Report Share Posted April 5, 2013 You lost me at 4K max. Thank god I'm not in finance... Ha Yeah I do tend to over analyze - let me put it this way, it is a gamble - if you win you get 15-20K, if you lose then you lose say 10K roughly (4K plus the difference in your LOC interest compared to OSAP interest). You can chose to place that bet or chose not to - at what odds of winning would you play that game? Link to comment Share on other sites More sharing options...
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